Solicitor restricted and bookkeeper banned after £486k client money scandal exposed
Michael Thomas Barry, a solicitor of more than 30 years’ standing, has been banned from managing firms after the Solicitors Disciplinary Tribunal (SDT) found he failed to prevent almost £486,000 of client money being wrongly transferred. His bookkeeper, Rachel Taylor, admitted carrying out the transfers and has been barred from working in any legal practice.
The hearing, which took place remotely in May 2020, examined how funds were repeatedly siphoned from the client account at Mallory & Barry, a Cardiff-based high street practice led by Barry. Taylor, who had more than two decades’ bookkeeping experience at major Welsh firms, was hired in 2014 and trusted to handle the firm’s finances.
The tribunal was told that between May 2017 and June 2018, Taylor made a series of improper transfers totalling £486,794.64. This included £305,461 taken between May 2017 and January 2018, and a further £181,333.64 from February to June 2018. Money was moved from the client account to cover the firm’s expenses, including office payments, salaries and tax liabilities, leaving repeated shortfalls.
Embed from Getty ImagesAn accountant’s report in early 2018 highlighted a deficit of more than £120,000, which Barry repaid personally to restore the client account. But despite being alerted, Barry allowed Taylor to continue in her role without adding any safeguards. Within months, more transfers had been made, creating another shortage of over £67,000 by June 2018.
In evidence, Barry admitted he had failed to supervise properly. He told investigators he trusted Taylor’s assurances that the behaviour would not recur, describing her as highly intelligent and “switched on.” The tribunal heard he had little grasp of the Solicitors Accounts Rules and often did not understand the reconciliations placed before him.
Taylor, representing herself, admitted making the transfers. She said her motivation was to keep the firm afloat financially, not personal gain. The SDT accepted this but found her conduct deliberate, repeated and concealed from Barry.
Barry, who qualified in 1985, argued that no clients ultimately lost money, as the shortages were rectified from his own funds. He admitted manifest incompetence but denied recklessness. The tribunal accepted that he had acted naively rather than recklessly, but still found his failures serious enough to undermine public trust in the profession.
In its ruling, the SDT said:
“Client money is sacrosanct. The First Respondent’s failure to prevent repeated, large-scale transfers represented a grave departure from the standards expected of solicitors. The Second Respondent deliberately moved substantial sums, creating serious risk to clients and the reputation of the profession.”
Barry avoided being struck off, but the tribunal imposed strict restrictions on his practice. He is banned indefinitely from managing a firm, acting as a compliance officer, or holding client money without express SRA approval. Taylor, meanwhile, is permanently prohibited from working in any legal practice without the regulator’s consent.
On costs, the tribunal ordered Barry to pay £10,700.70 and Taylor £7,133.80, after reducing the SRA’s original application as “excessive.”
The SDT noted that Barry had shown genuine remorse, admitted his failings, and had an otherwise unblemished career. However, the scale and duration of the misconduct, coupled with his lack of oversight, meant restrictions were essential to protect the public.
For Taylor, the panel accepted her cooperation and remorse but concluded that her repeated misuse of client money meant she could not be trusted in any legal practice.
The case underlines the devastating consequences when solicitors fail to monitor client accounts and delegate responsibilities without adequate checks